Progressive Congresswoman Alexandria Ocasio-Cortez (D-NY) told Yahoo Finance in an exclusive interview that corporate "price gouging" has fueled inflation, placing the blame largely on dominant companies that hike prices and rake in profits without fear of competition.
She strongly rejected claims that government stimulus in response to COVID-19 has caused the price spike, warning that such a diagnosis of the problem could lead to spending cuts with dire consequences for millions of people dependent on federal support.
"A lot of these price increases are potentially due to just straight price gouging by corporations," says Ocasio-Cortez, who focused her attention especially on industries with high corporate concentrations.
The remarks from Ocasio-Cortez, who spoke to Yahoo Finance on Jan. 27, came a day after Federal Reserve Chairman Jerome Powell signaled that the central bank will likely raise interest rates at its next policy-setting meeting in mid-March in an effort to rein in inflation.
A Commerce Department report on Friday showed that prices jumped 5.8% last year, the sharpest rise since 1982.
To be sure, Ocasio-Cortez acknowledged other reasons for inflation such as pandemic-related supply chain disruptions and labor shortages.
But her criticism of corporate behavior echoes comments in recent weeks from Sen. Sherrod Brown (D-OH), Sen. Elizabeth Warren (D-MA), and the White House, all of whom have identified exorbitant profits as a contributing factor behind the rise in prices.
Ocasio-Cortez, a critic of corporate power since she joined the House in 2019, called for policy action on antitrust enforcement and worker protections as a means to address inflation.
"If we say there are real antitrust issues here —
there's a lot of corporate abuse of power leading to price-gouging," she says. "Then that allows us to pursue lanes such as antitrust and also pursue labor protections, COVID protections, that can help people get back into the workplace and stay safe in the workplace."
Economist Larry Summers, former Treasury Secretary under Bill Clinton and director of the National Economic Council under Barack Obama, has also pointed to pandemic-related government stimulus as a driver of inflation.
In response to the notion that federal spending has caused inflation, Ocasio-Cortez said: "I couldn't disagree more with that assessment."
"The danger here is that if we say we're helping working people too much and say that the cause of this is, 'Oh, it's because we provided too much assistance during the American Rescue Plan. Stimulus checks were too generous,'" she says.
"What that's going to result in is a pullback in the assistance that some families need the most right now," she adds.